Russian anti-monopoly chief accuses developers of unlawful cartel practices
[Presenter] The government focused today on what most Russians see as one of the most sensitive issues, namely
housing. [Passage omitted.]
[Correspondent Roman Darpinyan] One of the problems that need to be addressed is excessively high housing prices.
[Passage omitted] According to Industry and Energy Minister Viktor Khristenko, the developers' profit margins arise
not so much from their desire to make superprofits as from the need to overcome administrative barriers. In other words,
the cost of housing includes huge bribes.
Against this background, the situation in Moscow was discussed as a separate issue at the government meeting. Housing
prices [in Moscow] nearly double every year, and in April the average price exceeded 1,700 dollars for one square metre.
This is even higher than in most European capitals. All this prompted the prime minister to speak for the first time of
the need to control rising housing costs in the capital.
[Mikhail Fradkov, Russian prime minister] Members of the public are willing to invest their own money in housing
construction. At the same time, prices in the housing market remain extremely high.
[Correspondent] The prime minister was backed by the head of the Antimonopoly Service, Igor Artemyev, though his
statement was even more hard-hitting. In effect, he accused monopolists in the housing market of unlawful coordinated
actions. He noted that major companies were, as he put it, in certain relations with local authorities, and even though
they did not sign cartel agreements, their actions were coordinated, while the market was assuming all the
characteristics of a speculative one, when prices are set unjustifiably high because of collusion, and monopoly profits
are reaped. According to Artemyev, the government has to liberalize procedures for obtaining plots for construction,
otherwise all the measures proposed will only serve to make the monopolists even richer.
Meanwhile the government has prepared a number of serious steps to make housing more affordable. For examples, tax
concessions are to be introduced. Viktor Khristenko said all transactions involving the purchase of housing and land are
expected to be exempt from value-added tax.
All 27 bills the government has drafted to make buying housing more affordable will soon be sent to the State
Duma.
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